India restores subsidies for chemical tankers, boosting local yards with a ₹20,416cr aid scheme to support domestic trade.
The Ministry of Ports, Shipping and Waterways has revised its Shipbuilding Financial Assistance Scheme to include chemical tankers as specialised vessels. This policy correction ensures that domestic shipyards remain eligible for significant government subsidies when constructing these high-value ships.
The decision follows an amendment issued on 07 January 2026, which rectified an oversight in the guidelines published on 26 Dec 2025. By reclassifying the category as Gas, Oil, and Chemical Carriers, the government has provided vital clarity for shipbuilders pursuing international contracts.
The government has ring-fenced ₹20,416 crore for this financial assistance programme, which is designed to promote the domestic production of sophisticated, eco-friendly, and specialised maritime assets.
Under the updated framework, the financial support is structured to incentivise large-scale projects:
- Base assistance: Shipyards receive a 15 percent subsidy on the contract value for the first ₹100 crore.
- Tiered support: An additional 25 percent subsidy is applied to any contract value exceeding the ₹100 crore threshold.
- Example: For a specialised vessel valued at ₹300 crore, a shipyard would qualify for 15 percent on the initial ₹100 crore and 25 percent on the remaining ₹200 crore.
The inclusion of chemical carriers is seen as a major win for the industry, particularly for facilities such as the large dry dock at Pipavav in Gujarat. This facility, now under the management of Swan Group, recently secured a Letter of Intent to build six 18,000-tonne chemical tankers for a European owner in a deal worth approximately $220 million.
The expanded list of vessels eligible for state aid now encompasses:
- Energy Carriers: LNG, LPG, and ammonia carriers.
- Green Vessels: Ships powered by electric batteries, hydrogen fuel cells, or methanol.
- Specialised Units: Floating production storage and offloading (FPSO) units and polar exploration vessels.
This policy shift is intended to help Indian shipyards compete more effectively on the global stage, offsetting the higher costs associated with domestic manufacturing while fostering a self-reliant maritime ecosystem.
SOURCE – ET INFRA
